Carney: Hogg’s mistake should not mean tougher rules for bank bosses

The departure of deputy governor Charlotte Hogg from the Bank of England should not inadvertently lead to a tightening of standards for senior managers in the banking sector, according to Mark Carney.

Speaking at a Banking Standards Board seminar on ethics and culture this morning, the central bank governor said the UK’s Senior Managers Regime - which sets a code of conduct for senior executives - had been adopted by the Bank but that "one of our colleagues did not meet these high standards recently".

He said: "Our newly appointed deputy governor for markets and banking, Charlotte Hogg, had previously not disclosed a relevant family relationship, as was required under our staff Code of Conduct."

Carney warned that "recent events" must not prompt an inadvertent tightening of "perceived standards for the industry because that could have senior managers running scared, drive compliance underground and undermine our collective objectives".

He said that could make it harder for City firms "to find candidates of sufficient calibre willing to take on senior roles" and added that there should not be a "'one strike and you are out' regime for an honest mistake".

Speaking at the same event, William Dudley, president and chief executive of the Federal Reserve Bank of New York, said that if the industry wants to improve culture and conduct, "we need to start by being realists about human behaviour".

He said: "Cultures do not change simply by exhortation. Eloquent speeches, a well-phrased value statement, and an annual requirement to acknowledge the code of conduct are just not sufficient."

He added that managers must lead by example: "Senior executives must be seen within the firm to expect and respect challenges, and in turn must challenge ideas themselves."